PG&E briefing warned of major risk of gas disaster
Jaxon Van Derbeken, Chronicle Staff Writer
San Francisco Chronicle August 7, 2011 04:00 AM
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Pacific Gas and Electric Co.'s top officials were warned two months before the San Bruno pipeline explosion that gaps in the utility's gas system records, upkeep and emergency response plan created an "unacceptable risk" of a disaster, documents recently filed with state regulators show.
A report by PG&E's in-house risk management group all but predicted the coming calamity, called the company's gas-safety program weak, and said an accident on the firm's natural-gas lines would raise questions about what top executives had "known or should have known" about the system's vulnerabilities.
The group predicted that a disaster would be "exacerbated by PG&E's failure to adequately respond." It listed likely problems including equipment problems, emergency communications breakdowns, and reliance on untrained employees as troubleshooters - all of which were factors Sept. 9 when a 30-inch gas transmission line exploded in San Bruno, killing eight people and destroying 38 homes.
The report said a disaster would lead to an international hit to PG&E's image, "sustained news coverage," and a loss of $500 million or more.
"It points to many systemic issues that are proving very prophetic," said Richard Kuprewicz, a pipeline safety expert in Redmond, Wash., who has followed the San Bruno investigation. "These issues don't just show up overnight. This is a bigger problem, and they had to have known about this for a while."
PG&E spokesman Brian Swanson said the report was the product of "an active effort by a cross-functional team of subject matter experts to identify and prioritize potential risks across the gas and electric business."
"We then developed appropriate action plans to address those risks as part of the company's commitment to safe and reliable operations," he said.
The group's report detailed three doomsday scenarios that "pose a potentially catastrophic risk to PG&E" and its gas system. Two were remarkably similar to the San Bruno disaster.
One scenario was a blast "caused by over-pressurization due to unmaintained high-pressure regulators" in the gas distribution system, and the other involved leaks in urban pipelines causing a series of explosions or fires. A third nightmare scenario envisioned PG&E digging into its own lines by mistake.
"It is kind of refreshing that someone had the nerve to tell the management that they really had some problems out there," said Royce Don Deaver, a pipeline expert and industry veteran from Texas. "They knew they had lots of problems."
The "system safety" risk analysis effort was led by Ed Salas, a senior operations vice president at the company at the time, and included two dozen top and mid-level officials overseeing gas and electrical operations.
The in-house assessment rated PG&E's overall gas safety program as weak and gave poor marks to its first-responder training program and its maintenance of gas-pressure-regulating equipment.
A report by PG&E's in-house risk management group all but predicted the coming calamity, called the company's gas-safety program weak, and said an accident on the firm's natural-gas lines would raise questions about what top executives had "known or should have known" about the system's vulnerabilities.
The group predicted that a disaster would be "exacerbated by PG&E's failure to adequately respond." It listed likely problems including equipment problems, emergency communications breakdowns, and reliance on untrained employees as troubleshooters - all of which were factors Sept. 9 when a 30-inch gas transmission line exploded in San Bruno, killing eight people and destroying 38 homes.
'Prophetic' findings
The report urged PG&E to install more automatic shut-off valves on pipelines to curtail damage in a pipeline explosion, advice that the company had largely ignored for years. When the San Bruno line exploded, it took workers an hour and a half to shut off manual control valves, compared with the minutes it would have taken to activate automated valves.The report said a disaster would lead to an international hit to PG&E's image, "sustained news coverage," and a loss of $500 million or more.
"It points to many systemic issues that are proving very prophetic," said Richard Kuprewicz, a pipeline safety expert in Redmond, Wash., who has followed the San Bruno investigation. "These issues don't just show up overnight. This is a bigger problem, and they had to have known about this for a while."
Doomsday scenarios
PG&E's then-chairman, Peter Darbee, President Chris Johns and other top executives were told of the dangers in a July 13, 2010, briefing by the risk management group. The company ultimately gave the report to a blue-ribbon panel that investigated PG&E's systemic issues for the California Public Utilities Commission, and the panel included it as an appendix in its findings in June.PG&E spokesman Brian Swanson said the report was the product of "an active effort by a cross-functional team of subject matter experts to identify and prioritize potential risks across the gas and electric business."
"We then developed appropriate action plans to address those risks as part of the company's commitment to safe and reliable operations," he said.
The group's report detailed three doomsday scenarios that "pose a potentially catastrophic risk to PG&E" and its gas system. Two were remarkably similar to the San Bruno disaster.
One scenario was a blast "caused by over-pressurization due to unmaintained high-pressure regulators" in the gas distribution system, and the other involved leaks in urban pipelines causing a series of explosions or fires. A third nightmare scenario envisioned PG&E digging into its own lines by mistake.
"It is kind of refreshing that someone had the nerve to tell the management that they really had some problems out there," said Royce Don Deaver, a pipeline expert and industry veteran from Texas. "They knew they had lots of problems."
The "system safety" risk analysis effort was led by Ed Salas, a senior operations vice president at the company at the time, and included two dozen top and mid-level officials overseeing gas and electrical operations.
Poor marks
Salas did not respond to calls last week seeking comment. He and another member of the risk management group, then-Chief Operating Officer Jack Keenan, left the company in a post-disaster shakeup.The in-house assessment rated PG&E's overall gas safety program as weak and gave poor marks to its first-responder training program and its maintenance of gas-pressure-regulating equipment.
Pressure regulators may have played a key role in the Sept. 9 disaster. They fully opened automatically during a power failure at the San Bruno line's terminus in Milpitas, resulting in a pressure buildup in the pipe.
The risk management group also faulted PG&E's protocols for evaluating and reporting leaks in gas lines.
PG&E's risk-management group report focused on the valves in the lower-pressure distribution system as being problematic, while stressing that the high-pressure transmission lines were under "strict management standards" imposed by federal and state regulators. California regulators found during a May 2010 transmission system audit that PG&E was cutting corners in its inspection regimen.
The state's Public Utilities Commission did not issue any citations against the company, however, and did not deliver the audit until one month after the San Bruno explosion.
All the potential problems with PG&E's emergency response laid out in the risk management group's report plagued the company during the San Bruno disaster.
PG&E's command center staff struggled at first to grasp what was happening. Control monitors speculated that a plane crash had caused the explosion.
PG&E system controllers never called 911, had trouble contacting trained crews to shut down the line, and ultimately dispatched an untrained service representative - who got stuck in traffic - to shut off the gas.
The report turned out to be prophetic in another area, warning that a major accident would lead to the perception of PG&E "not meeting state and local regulatory and safety requirements."
It included a long list of possible "risk drivers" for PG&E, including aging equipment, "unmapped or improperly mapped" lines and equipment at risk of third-party damage, and "inadequate design/construction/maintenance standards and procedures" on the gas system.
The report advocated that crews inspect the gas system for "potentially unmaintained" pressure valves and regulators and otherwise improve safety efforts on gas distribution lines.
The assessment concluded that the problems posed a risk that was "unacceptable without further corrective action."
To reduce the risk of failure from the gaps in safety, the report also advocated better management standards and training, heightened prevention efforts, and improved quality control protocols.
In addition, it recommended that PG&E consider adopting improved technology for its pipelines, "such as gas shut-off devices."
PG&E had largely dismissed automatic shut-off valves on the grounds they did little to improve safety. In 2006, an internal company memo cited industry studies that suggested that most of the damage from a pipeline blast would happen within seconds - not enough time for even an automatic valve to be effective.
The company had a change of heart after the San Bruno explosion and embarked on a valve installation program.
"You can't tell me they wake up out of a slumber or a coma and realize that gas kills people," Deaver said.
"Everyone knows that running gas lines is a risky business. They just wanted to sweep it under the rug. All of these things and problems they have identified, they have known it for years and years."
Safety law violations
The report was delivered to PG&E executives at the same time an internal company audit of its Peninsula division was finding more than 700 violations of federal gas safety law. That audit, completed one month before the San Bruno disaster, faulted the division for everything from inadequate emergency response plans and a lack of proper pipeline leak surveys to shoddy record keeping and substandard maintenance of pressure regulators and pipeline shut-off valves.PG&E's risk-management group report focused on the valves in the lower-pressure distribution system as being problematic, while stressing that the high-pressure transmission lines were under "strict management standards" imposed by federal and state regulators. California regulators found during a May 2010 transmission system audit that PG&E was cutting corners in its inspection regimen.
The state's Public Utilities Commission did not issue any citations against the company, however, and did not deliver the audit until one month after the San Bruno explosion.
All the potential problems with PG&E's emergency response laid out in the risk management group's report plagued the company during the San Bruno disaster.
PG&E's command center staff struggled at first to grasp what was happening. Control monitors speculated that a plane crash had caused the explosion.
PG&E system controllers never called 911, had trouble contacting trained crews to shut down the line, and ultimately dispatched an untrained service representative - who got stuck in traffic - to shut off the gas.
Tainting public's perception
Technicians living nearby finally acted on their own and activated manual shut-off valves on the pipeline 90 minutes after the blast.The report turned out to be prophetic in another area, warning that a major accident would lead to the perception of PG&E "not meeting state and local regulatory and safety requirements."
It included a long list of possible "risk drivers" for PG&E, including aging equipment, "unmapped or improperly mapped" lines and equipment at risk of third-party damage, and "inadequate design/construction/maintenance standards and procedures" on the gas system.
The report advocated that crews inspect the gas system for "potentially unmaintained" pressure valves and regulators and otherwise improve safety efforts on gas distribution lines.
The assessment concluded that the problems posed a risk that was "unacceptable without further corrective action."
To reduce the risk of failure from the gaps in safety, the report also advocated better management standards and training, heightened prevention efforts, and improved quality control protocols.
In addition, it recommended that PG&E consider adopting improved technology for its pipelines, "such as gas shut-off devices."
PG&E had largely dismissed automatic shut-off valves on the grounds they did little to improve safety. In 2006, an internal company memo cited industry studies that suggested that most of the damage from a pipeline blast would happen within seconds - not enough time for even an automatic valve to be effective.
The company had a change of heart after the San Bruno explosion and embarked on a valve installation program.
'Known it for years'
Deaver, the Texas pipeline expert, said the report ignored key problems in PG&E's system that have come to light since the blast, including flawed pipeline welds such as the one that ruptured in San Bruno. Still, he said, it should have put PG&E on notice."You can't tell me they wake up out of a slumber or a coma and realize that gas kills people," Deaver said.
"Everyone knows that running gas lines is a risky business. They just wanted to sweep it under the rug. All of these things and problems they have identified, they have known it for years and years."
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